Begbies Traynor Group has completed the sale of Red Flag Alert LLP – which operates its credit risk database – as the group continues to refocus on its core businesses.
Group executive chairman Ric Traynor has snapped up a controlling interest in the LLP which runs the Red Flag Alert credit risk database, while the group will retain a minority interest in the partnership.
Traynor has committed to injecting up to £1m in the LLP to fund ongoing losses as well as future development.
For the year ending April 30 2011 the business recorded revenue of £0.2m but also posted an operating loss of £0.7m – up on £0.6m in 2010.
The Red Flag business employs 24 staff who have transferred to the LLP.
The database monitors the health of businesses across a range of sectors and is used to produce the Red Flag Alert quarterly statistics publication.
But third-party feedback from third parties found the business was ‘not yet sufficiently established for consideration as a standalone acquisition opportunity’.
Earlier this year the Red Flag Alert found the number of businesses facing ‘critical’ levels of financial distress had risen by a quarter for Q4 2011, compared to Q4 2010.
Its sale follows the offloading of Begbies’ insolvency and restructuring division in the Channel Islands to Grant Thornton for £250,000.